Pushback against centralized energy will benefit fuel cells

Industrial countries currently generate most of their electricity through large centralized power plants, but the process is evolving.  Large centralized facilities became the dominant form of developing electricity from coal, hydro, nuclear, or gas for economic and health reasons, and while some renewable energy projects follow this centralized model, there is a movement spreading to begin decentralizing our energy matrix.

Decentralized power, or distributed energy, aims “to generate electricity from many small energy sources”.  With the development of multiple renewable energy technologies (solar, wind, fuel cells), a new model is developing among businesses, government agencies, and individual citizens regarding the process of generating energy.

While many solar and wind projects continue to follow the centralized model, current fuel cell technology keeps many of these types of projects on a scale that makes them fit more appropriately into a decentralized model. Fuel cells work pretty much “by turning pretty much any feedstock (natural gas, biogas, propane, even coal) into electricity and heat. Because there’s no combustion inside the fuel cell, there are no emissions.  Fuel cells rely on an electro-chemical reaction. Because the cells are built to take advantage of the heat they generate, they are much more efficient than traditional fossil-fuel plants”, and are considerably smaller than coal-fired power plants. 

Currently, fuel cells generate electricity (from biogas and natural gas) for roughly 10-15 cents per kW/h; the average retail price of all electricity generated from all sources for December 2008 was 9.64 cents per kW/h.  

For many businesses in the industrial sector, stability in prices is more attractive than those that fluctuate wildly.  Once solar panels, wind turbine, or a fuel cell stack are installed at an industrial facility, no longer does the company have to worry about feedstock gluts or shortages, nor do they have to worry about seasonal fluctuations in the price of energy to the same degree as under a centralized model.  Each individual business can become its own power plant; in the case of the larger industrial facilities, electricity generated can not only meet onsite needs, but excess energy developed can also be sent back into the grid, thus creating another source of revenue.

The U.S. currently has roughly 1000 gigawatts of installed electricity capacity (1000 kW = 1 MW; 1000 MW = 1 GW).  At the end of 2008, 21,000 MW of U.S. capacity were generated from wind, and roughly 9000 MW were developed from solar; but while wind and solar have the ability to develop on a utility-scale (large centralized projects), current fuel cell technology keeps the industry more in line with a decentralized model of electricity generation.  

Many coal-fired power plants are built large; the largest in the world is the Kendal Power Station in South Africa with over 4000 MW of installed capacity; in the U.S., 1000-1500 MW is a common size. These centralized coal plants are much larger than many wind and solar projects. The largest wind project in the U.S. and in the world is FP&L’s Horse Hollow Wind Energy Center at 735 MW. Currently, the large wind turbines used offshore can generate up to 5 MW each; the ones used onshore pump out less, more like 3 MW.  In order to get up to the size of one coal-fired power plant (1000 MW), 200-350 turbines would have to be installed.  

In comparison, one fuel cell company, Fuel Cell Energy (FCE) seeks to put the energy generating facilities onsite.  FCE’s fuel cells pump out about 1 MW each, not very attractive to utilities or in a centralized energy structure, but almost a perfect size for many businesses seeking to gain more control over their energy costs.

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Is America moving toward a decentralized power model, one made up of hundreds of thousands of smaller power generation technologies located onsite rather than on the outskirts of population centers?  Clean energy would allow us to place our energy generating facilities closer to population centers, unlike the coal facilities that have to be built outside of population centers because of the harmful pollutants released in the generation process.

There is a pushback developing against centralized energy.  The cost of building new large power plants and the transmission lines necessary to bring that energy to where it is demanded is becoming restrictive.  Until CCS technology is developed, many coal-fired power plants of the 1000 MW size and above are having trouble securing financing because of pollution limits.  Smaller, onsite power generation like solar panels or fuel cells secure the power source and the price of electricity for the business that installs them well into the future.

Under a decentralized structure, it is not only in the industrial sector that fuel cells will flourish, but they also stand to revolutionize the residential energy generation and consumption markets.  Honda’s Home Energy System “generates hydrogen from natural gas, and is designed to provide heat and electricity for the home through fuel cell cogeneration and to supply fuel for a hydrogen-powered fuel cell vehicle”.

In the future, all of our homes and businesses very well might become mini power plants, generating electricity and heat and fuel onsite.  Once retrofitted, the grid can act to balance the load, but decentralized energy generation allows for multiple smaller sources of clean energy to contribute to overall installed U.S. capacity.